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Plans for a block of 146 student flats on the former St Mary Bredin School site have been thrown out by the city council.
But members of the planning committee have been warned they could now face a costly appeal after rejecting officers' advice that there were insufficient grounds for refusal,
The decision over the site off the city ring road contradicted evidence from Historic England, which said that although the land was of historical significance, it believed the proposed building was acceptable,
Cllr Nick Eden-Green proposed it should be rejected on the grounds that the planned student block was oppressive and overbearing in its historic setting and gained support from members.
He said it would "compound the mistake" of Palamon Court and offered no open space.
Councillors earlier heard that an application to have the Victorian school listed was refused by Historic England as it was of insufficient merit.
It was also deemed to have no viable alternative use.
Objectors said the historic Norman mound on which the school sits should at least be preserved.
They branded the proposed student block as an "overbearing pastiche".
Dick Vane Wright, of the Oaten Hill and South Canterbury Association, said it would "desecrate" the site and create a canyon effect on the city ring road.
Cllr George Metcalfe urged the committee to reject the application saying the building should be saved for educational use.
Cllr Ashley Clark said it was a "finely-balanced" argument but agreed the scale of the development was oppressive.
Cllr Robert Jones believed "considerable harm" to the city would be caused by the development
The plan was also criticised by the Canterbury Heritage Design Forum and Save Britain Heritage also submitted an 11th hour objection and plea for the old school to be spared.
But architect Guy Holloway, who also created the neighbouring Palamon Court, which has been short-listed for an architecture award, told the meeting the scheme was the result of two years work and consultation to achieve the best design.
"We want to design buildings that stand the test of time", he said.